The labour market for bicycle mechanics in a town was initially in equilibrium at an hourly wage of £13, with 45 mechanics employed. Demand for bicycle repairs then increased. The supply of bicycle mechanics did not change.
Table 1 shows the labour market after demand for bicycle repairs increased.
| Hourly wage | Mechanics demanded | Mechanics supplied |
|---|---|---|
| £13 | 75 | 45 |
| £15 | 60 | 60 |
Calculate the excess demand for bicycle mechanics at an hourly wage of £13 after demand for bicycle repairs increased.
Explain the likely effect of the increase in demand for bicycle repairs on the hourly wage and the number of bicycle mechanics employed. Use Table 1 in your answer.
149 exam-style questions on AQA GCSE Economics 1.5 Competitive and concentrated markets, covering 1.5.1a The range of market structures, 1.5.1b Distinguishing between market structures, 1.5.2a Characteristics of a competitive market, 1.5.2b How producers operate in competitive markets, 1.5.2c The economic impact of competition, 1.5.3a Characteristics of a non-competitive market, 1.5.3b How producers operate in non-competitive markets, 1.5.3c Monopoly and oligopoly, 1.5.4a The labour market and wage determination, and 1.5.4b Gross and net pay. Each one has a worked solution and a mark scheme showing where the marks go.